Loading ...Off shore drillers, oil platforms…
That I mentioned the other day, started to move today, seems like it:
https://stockcharts.com/freecharts/candleglance.html?RIG,TDW,VAL,NE|B|0
I wonder why, oil didn’t move much. There was ‘part 2’ interview today, haven’t listened to it yet. Can I attach MP3 file or that would be too much? I better go back and track down DL link. Here it is:
https://podcasts.apple.com/us/podcast/value-hive-podcast/id1492171651?i=1000618859820
Yea did you see that the SPR was filled at 750m Bbls and Biden has now drawn it down to 348m Bbls and he is still drawing it down. When they have to fill it up oil prices are going to da moon
I wonder if they (this administration) ever plan to start filling it up. Oil is bad!
Overall, the main energy ETFs are sagging only very grudgingly, in an extended overlapping saw tooth corrective channel. Makes it hard to gauge that bigger turn as there are frequent bounces so far capped everytime. I see room for one more cycle low, perhaps. Crude prices remain well above the 2019 levels.
> Overall, the main energy ETFs are sagging only very grudgingly
Well, these deep ocean drillers, platformes, services are not direct play on oil. Here is certain situation, that there are not enough drilling platforms available. Right now, order book (orders for building new platforms) is non existent. There was long enough period of time with oil prices low enough that this sector was in trouble. Most of companies went to bankruptcy (VAL, NE…). Some didn’t such as RIG (that’s why RIG still has big debt) Companies that went into bankruptcy (VAL, NE) at least wrote off most of debt. So this tells you hard times are behind this whole sector.
Because of troubled times, there was not adequate investments, and now you have shortages. Typical for cycles. At this time, producers seems like they are already fighting for these platforms. And day rates are slowly creeping higher. Currently are just a little bellow 500k per day, for the biggest, modern platforms. Which is starting to show as good profits for these companies, even for the ones with lots of debt (RIG).
But prices are not even close high enough, that companies would start ordering to build new drilling platforms which are now more expensive to build than ever before. And even when this does happen, you still have a lag effect from when orders are being placed and when platforms are actually build and delivered and put into service. So there are years, when this happen and in the mean time, operators will fight for available platforms.
If this is already happening at these lower oil prices, how it will be, when at some point oil prices are higher?
So, not so much to do with energy sector over all, but more with supply/demand in this niche sector.
Unless they purge big part of population, and it is no secret, some are trying hard…